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144A Offering

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144A Offering Investor Presentation June 2019 Forward-Looking Statements All statements other than statements of historical fact included in this presentation for Clipper Realty Inc. (the “Company”) regarding the Company’s financial position, business strategy and the plans, objectives, expectations, or assumptions of management for future operations, are forward-looking statements. When used in this presentation, words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “continue,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes are intended to identify forward-looking statements, which are generally not historical in nature. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. These risks, contingencies and uncertainties include, but are not limited to, the following: - market and economic conditions affecting occupancy levels, rental rates, the overall market value of our properties, our access to capital and the cost of capital and our ability to refinance indebtedness; - economic or regulatory developments in New York City; - the single government tenant in our commercial buildings may suffer financial difficulty; - our ability to control operating costs to the degree anticipated; - the risk of damage to our properties, including from severe weather, natural disasters, climate change and terrorist attacks; - risks related to financing, cost overruns and fluctuations in occupancy rates and rents resulting from development or redevelopment activities and the risk that we may not be able to pursue or complete development or redevelopment activities or that such development or redevelopment activities may not be profitable; - concessions or significant capital expenditures that may be required to attract and retain tenants; - the relative illiquidity of real estate investments; - competition affecting our ability to engage in investment and development opportunities or attract or retain tenants; - unknown or contingent liabilities in properties acquired in formative and future transactions; - changes in rent stabilization regulations or claims by tenants in rent-stabilized units that their rents exceed specified maximum amounts under current regulations; - the possible effects of departure of key personnel in our management team on our investment opportunities and relationships with lenders and prospective business partners; - conflicts of interest faced by members of management relating to the acquisition of assets and the development of properties, which may not be resolved in our favor; - a transfer of a controlling interest in any of our properties may obligate us to pay transfer tax based on the fair market value of the real property transferred; and - other risks and risk factors or uncertainties identified from time to time in our filings with the Securities and Exchange Commission (“SEC”). Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Reference is made to a more complete discussion of forward-looking statements and applicable risks contained under the captions “Cautionary Note Concerning Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 7, 2019, and other reports filed from time to time with the SEC. Clipper Realty Inc. undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise. 1 Investment Highlights Only Pure-Play New York City-Centric REIT Robust NYC real estate fundamentals with focus on stable multifamily asset class Portfolio with Significant Upside Potential Acquire high-quality, diverse New York City real estate at a discount to private market value, with opportunities to re-develop and lease up Strong Expected NOI Growth Embedded rent growth as existing below-market rents reach current market across the portfolio Proven Track Record of Value Creation Efficient, internally managed platform led by management team with 70+ years of experience in the challenging New York City environment High-Quality Management Team with Aligned Interests Founders own 67% of the company, with significant public company experience and deep relationships that drive first look at many NYC multifamily and office opportunities 2 Attractive Current Portfolio – 66 Buildings, 3.1mm Leasable Square Feet • Multifamily - 99% leased • Office - 100% leased to New York City • Retail - 100% leased • Flatbush Gardens – low-cost option in Brooklyn, delivering steady growth • Tribeca House – significantly below-market residential rents in downtown Manhattan, long-term retail opportunity • 141 Livingston / 250 Livingston – value-add, long-term office repositioning / potential residential conversion • Aspen – transitioning uptown Manhattan neighborhood benefiting from Second Avenue subway completion • 10 West 65th Street – prime residential location near Central Park and Lincoln Center on Manhattan’s Upper West Side • 107 Columbia Heights – renovations nearly complete on recent acquisition in iconic Brooklyn Heights neighborhood Annual Base Annual Base Rental Leasable Percent Property Submarket Rental Revenue Square Feet Leased (1) Revenue by Geography ($ mm) (2) Multifamily Brooklyn Manhattan Flatbush Gardens complex Brooklyn 1,748,577 (3) 99.5% $40.7 50 Murray Street Manhattan 396,528 99.0% 25.8 53 Park Place Manhattan 86,288 99.1% 5.9 Aspen Manhattan 165,542 97.8% 5.8 10 West 65th Street Manhattan 75,678 72.0% 2.9 44% 250 Livingston Street Brooklyn 26,819 100.0% 1.1 56% Total Multifamily 2,499,432 98.5% $82.2 Office 141 Livingston Street Brooklyn 206,084 100.0% $8.2 250 Livingston Street Brooklyn 294,144 (4) 100.0% 8.2 Total Office 500,228 100.0% $16.4 Annual Base Rental Retail Revenue by Property Type 50 Murray Street (retail) Manhattan 44,436 100.0% $2.4 50 Murray Street (parking) Manhattan 24,200 100.0% 1.2 Multifamily Office Retail 53 Park Place (retail) Manhattan 8,600 100.0% 0.4 141 Livingston Street (parking/other) Brooklyn 14,853 100.0% 0.4 250 Livingston Street (retail) Brooklyn 990 100.0% 0.1 250 Livingston Street (parking) Brooklyn - - 0.2 Aspen (retail) Manhattan 21,060 100.0% 0.9 15% Aspen (parking) Manhattan - - 0.3 79% Total Retail 114,139 100.0% $5.9 6% Total Operating Portfolio 3,113,799 98.8% $104.5 Real Estate Under Development 107 Columbia Heights Brooklyn 102,131 (1) As of March 31, 2019 (2) As of December 31, 2018 3 (3) Comprises 59 buildings (4) Has been remeasured to approximately 342,000 square feet Well-Positioned Portfolio – Brooklyn and Manhattan Centrally Managed, Diverse Portfolio Aspen 10 West 65th Street Tribeca House 107 Columbia Heights 141 Livingston St. 250 Livingston St. Flatbush Gardens Headquarters 4 Strong New York City Real Estate Fundamentals Unwavering Demand From Institutional and Foreign Investors to Own NYC Real Estate • Gentrification shift driving people to urban areas -Largest and growing renter population in the U.S. • Strong job creation in NYC metro area supporting positive outlook • High demand for multifamily rental and office space with limited supply • Lack of available land for development limits prospects of significant supply growth • Replacement cost can be extremely high • Brooklyn office market continues to perform as firms look outside Manhattan in search of more affordable spaces Significant Increasing High Limited Barriers to Rents Demand Supply Entry Over Time Source: Industry research 5 Portfolio with Significant Upside Potential % of Property Potential Upside Drivers Portfolio(1) • In-place rents meaningfully lower than legal maximum chargeable per regulation, in gentrifying neighborhood Flatbush 39% • Rents are well below market of $30+ PSF Gardens • Potential to add FAR significantly in excess of original 500,000 sq. ft. amount under review(2) • Residential currently 14% below market ($69 PSF vs. $80 PSF market) Tribeca House 34% • Retail at massive discount to market ($52 PSF vs. $250+ PSF market for corner locations) • Purchased at half the value of potential condo conversion ($998 PSF vs. $2,000+ PSF) • 250 Livingston Street (9%) - Recently renewed lease with NYC for ten-year term commencing upon expiration of current leases in August 2020 Downtown - Encompasses 342,496 remeasured square feet at initial $43.62 blended rent PSF (vs. current blended $27.71 PSF) Brooklyn 17% - Expected to initially add approximately $5.0mm to property’s annual NOI Assets • 141 Livingston Street (8%) - Currently leased to NYC at $40 PSF; contracted upcoming rent increase to $50 PSF(3) • Well-located in transitioning neighborhood just north of Manhattan’s Yorkville section Aspen 7% • Proximity to Second Avenue Subway stop at 96th Street driving rents and tenant profile • Free-market rents 15-20% below market ($44 PSF vs. $50+ PSF market) • Prime residential location steps from Central Park, plus 53,000 sq. ft. of air rights 10 West 65th 3% • Recently brought 11 free-market units online following renovation Street • Received back ~50% of units in January (ahead of schedule) – repositioning/leasing at market rates • Highly desirable location in iconic Brooklyn Heights neighborhood, near public transportation and bridges 107 Columbia N/A
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